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President Donald Trump‘s budget office on Wednesday rescinded a memo freezing spending on federal grants, less than two days after it sparked widespread confusion and legal challenges across the country. The Monday evening memo from the White House Office of Management and Budget sparked uncertainty over a crucial financial lifeline for states, schools and organizations that rely on trillions of dollars from Washington and left the White House scrambling to explain what would and wouldn’t be subject to a pause in funding. The reversal was the latest sign that even with unified control of Washington, Trump’s plans to dramatically and rapidly reshape the government has some limits. The White House confirmed that OMB pulled the memo Wednesday in a two sentence notice sent to agencies and departments, but said that Trump’s underlying executive orders targeting federal spending in areas like diversity, equity and inclusion and climate change, remained in place. Administration officials said the notice to halt loans and grants was necessary to conduct a review to ensure that spending complies with Trumps recent blitz of executive orders. Agencies had been directed to answer a series of yes or no questions on each federal program by Feb. 7. The questions included does this program promote gender ideology? and does this program promote or support in any way abortion? Still, the vaguely worded memo, combined with incomplete answers from the White House throughout the day, left lawmakers, public officials and average Americans struggling to figure out what programs would be affected by the pause. Even temporary interruptions in funding could cause layoffs or delays in public services. The freeze was scheduled to go into effect at 5 p.m. Tuesday, but was stayed by a federal judge until at least Monday after an emergency hearing requested by nonprofit groups that receive federal grants. An additional lawsuit by Democratic state attorneys general was also pending. The Executive Orders issued by the President on funding reviews remain in full force and effect and will be rigorously implemented by all agencies and departments, White House press secretary Karoline Leavitt said, blaming the confusion on the courts and news outlets, not the administration. This action should effectively end the court case and allow the government to focus on enforcing the Presidents orders on controlling federal spending.” Administration officials insisted that despite the confusion, the order still had its intended effect by underscoring to federal agencies their obligations to abide by Trump’s executive orders. Although Trump had promised to turn Washington upside down if elected to a second term, the effects of his effort to pause funding were being felt far from the nations capital. Organizations like Meals on Wheels, which receives federal money to deliver food to the elderly, and Head Start which provides early childcare in lower income communities, were worried about getting cut off. On Tuesday, Trump administration officials said programs that provide direct assistance to Americans, including Medicare, Social Security, student loans and food stamps, would not be affected. But they sometimes struggled to provide a clear picture. Leavitt initially would not say whether Medicaid was exempted from the freeze, but the administration later clarified that it was. Democratic critics of the order moved swiftly to celebrate the action. This is an important victory for the American people whose voices were heard after massive pressure from every corner of this countryreal people made a difference by speaking out,” said Sen. Patty Murray, D-Wash. “Still, the Trump administrationthrough a combination of sheer incompetence, cruel intentions, and a willful disregard of the lawcaused real harm and chaos for millions over the span of the last 48 hours which is still ongoing.” Senate Democratic leader Chuck Schumer of New York said that Americans fought back and Donald Trump backed off. Chris Megerian and Zeke Miller, Associated Press
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E-Commerce
On Tuesday, President Trump issued a sweeping freeze on federal funding that drew widespread confusion before later being rescinded. But it was quickly followed by another pronouncement that could have major ripple effects across the federal government. In a move that echoed Elon Musk’s proposal to Twitter employees back in 2022down to the email subject linethe Trump administration made a surprising offer to two million federal workers. If they voluntarily resigned, they would receive full pay through the end of September; otherwise, they would risk being furloughed or reclassified as at-will employees. Those who stayed would also have to abide by the new return-to-office policy, which would require them to come in daily. Workers were told they had just over a week to consider and accept the offer. The bold announcement was, again, teased by Musk (and Vivek Ramaswamy) last year in an op-ed in the Wall Street Journal about plans for the Department of Government Efficiency (DOGE). “Requiring federal employees to come to the office five days a week would result in a wave of voluntary terminations that we welcome,” they wrote at the time. But Trump’s “deferred resignation” offer has elicited more questions than answers among federal workers and observers who have questioned whether it is legally sound. How will the buyouts work? Many federal workers were reportedly confused about whether they would be expected to continue working if they moved forward with the offer. Some workers were also unsure if the offer even applied to their roles, given the exemptions for those in certain roles across national security and immigration enforcement. In its memo, the Office of Personnel Management (OPM) said workers should send an email with the subject line “Resign” if they wished to leave. But the deferred resignation letter they were asked to accept suggested that being placed on leave was only one potential outcome. “I understand my employing agency will likely make adjustments in response to my resignation including moving, eliminating, consolidating, reassigning my position and tasks, reducing my official duties, and/or placing me on paid administrative leave until my resignation date,” the letter read. In an FAQ section, however, the OPM noted that “Except in rare cases determined by your agency, you are not expected to work.” Multiple posts on X from Elon Musk and the official DOGE account confirmed that information, and a senior White House official also told Axios that workers would not have to keep working if they accepted the offer, aside from taking care of customary tasks like returning work devices. Still, the American Federation of Government Employees (AFGE)the union that represents hundreds of thousands of federal workershas instructed its members not to accept the terms of the resignation offer. (In fact, many workers seem more emboldened to stay put following the proposal.) In a statement, AFGE president Everett Kelley said Trump’s ploy to cut millions of federal workers would have “vast, unintended consequences that will cause chaos for the Americans who depend on a functioning federal government.” The AFGE has also pushed back on the characterization of this offer as a buyout, arguing that it does not guarantee an employee’s resignation will be accepted or that they will receive the benefits being promised. “This offer should not be viewed as voluntary,” Kelley added. “Between the flurry of anti-worker executive orders and policies, it is clear that the Trump administration’s goal is to turn the federal government into a toxic environment where workers cannot stay even if they want to.” (The OPM did not respond to a request for comment.) Is any of this legal? Beyond the question of whether federal employees who resign will be expected to work in any capacity, it’s not clear whether the Trump administration can legally make an offer of this scale. Federal workers are not typically allowed to be on paid administrative leave for more than 10 days in a given year, and Trump has not received budget authorization from Congress for the buyouts. Some federal employees have already expressed concerns that they won’t see the money that Trump has promised. The AFGE and Democrats such as Senator Tim Kaine have also cautioned that federal employees who quit may not be guaranteed months of pay. “Theres no budget line item to pay people who are not showing up for work,” Kaine said on the Senate floor this week. “If you accept that offer and resign, hell stiff you.
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E-Commerce
Well, well, welllook who suddenly wants a word with the sheriff in the fair-use Wild West landscape of artificial intelligence. As Bloomberg first reported, Microsoft and its partner company OpenAI are investigating the white-hot Chinese startup DeepSeek after Microsoft security researchers allegedly discovered people linked to DeepSeek withdrawing large amounts of data through the companys API last fall. Elsewhere, White House AI czar David Sacks told Fox News on Tuesday that there is substantial evidence that DeepSeek distilled knowledge from OpenAIs AI models. These allegations align with other suspicious aspects of the new AI. For instance, when a Fast Company editor took DeepSeek for a test run earlier this week, the chatbot insisted it was made by Microsoft. Perhaps the Chinese companywhich built its new model in a matter of months with shockingly little funding and computing powerviolated the law by using OpenAIs output to develop its tech. Or maybe it operated entirely within a legal gray area. Either way, its ironic that a company whose entire business model is predicated on repurposing copyrighted material is now crying foul over another company repurposing its material. Ever since OpenAIs ChatGPT normalized generative AI in 2022, creators have accused it of essentially being a plagiarism machine. Large language models (LLMs) like ChatGPT require for their training immense sums of information about the world. That info often comes from the copyrighted work of human creators, many of whom did not sign off on their material being used for this purpose. Sometimes, the material is sourced and linked to; other times, not. But the direct use of copyrighted material is just standard AI. A February 2024 report from plagiarism detector Copyleaks found that 60% of ChatGPTs output contained some form of plagiarism. Lawsuits, litigation, and legal gray areas It should come as little surprise that all this plagiarism has kept Microsoft and OpenAI entangled in nonstop litigation over the past two years. The companies have faced class-action lawsuits from a group of nonfiction authors led by Julian Sancton and class-action lawsuits from such novelists as Jonathan Franzen and Jodi Picoult. Comedian Sarah Silverman, who is also an author, jumped in on yet another of these lawsuits, accusing not only OpenAI but also Meta of using copyrighted work without consent, without credit, and without compensation. And while publications such as the Wall Street Journal, Vox, and The Atlantic have entered into if-you-cant-beat-em-join-em partnership deals with Microsoft and OpenAI, the New York Times Company sued both companies for alleged copyright infringement in December of 2023. As of now, most of these cases are still ongoing, and the rules for fair use in training LLMs remain in flux. Whats illuminating in light of OpenAIs allegations against DeepSeek, however, is how OpenAI has defended its use of copyrighted material. During trial arguments earlier this month in the NYT Company case, OpenAI claimed (as ever) that its output is covered by the fair use doctrine, which permits the use of copyrighted material to create something new, as long as it doesnt compete with the original work. OpenAIs attorneys characterize ChatGPT as not actually storing copyrighted material, but merely relying on the aftereffects of material passing through its models during the training process. According to Digidays reporting on the hearing, an attorney representing OpenAI claimed, If I say to you, Yesterday all my troubles seemed so . . . , we will all think far away because we have been exposed to that text so many times, alluding to the lyrics of Yesterday by the Beatles. That doesnt mean you have a copy of that song somewhere in your brain. (It should be noted here that former Beatle Paul McCartney has also been quite vocal in his criticism of AI repurposing the work and creativity of human artists.) By OpenAIs own logic, maybe DeepSeek simply allowed output from a U.S. competitor to flow through its model during the training process. At this point, we dont know. (OpenAI confirmed with Fast Company that it is “reviewing” whether DeepSeek inappropriately used its data. Microsoft declined to comment on whats alleged in the Bloomberg report.) For years now, authors, journalists, artists, and all sorts of creators have been screaming at the top of their lungs, in and out of court, that AI platforms should either find a more ethical approach to their mission or abandon it altogether. Now that the entire American AI industry is reeling from a $1 trillion stock hit because a small startup allegedly gave them a taste of their own medicine, its no wonder that the response on social media has been a schadenfreude bonanza. Live by the fair use doctrine, die by the fair use doctrine.
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